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2017 Supreme(MP) 1069

IN THE HIGH COURT OF MADHYA PRADESH
V.K. SHUKLA, J.
Kamtheen Security Services, Indore - Petitioner
Versus
State of M.P. and others - Respondents
W.P. No. 10070 of 2016
Decided On : 29-06-2017

Advocates Appeared:
For the Petitioner: Brian D'silva, Amit Khatri
For the Respondent: Ms. Surbhi Nigam, Kapil Duggal with Siddharth Sharma

The central legal point established in the judgment is the necessity of giving an opportunity through a show cause notice before blacklisting, as emphasized by legal precedents.

Headnote:

Blacklisting - Contract Compliance - Article 226 of the Constitution of India - Erusian Equipment and Chemicals Ltd. v. State of W. B., (1975) 1 SCC 70, Raghunath Thakur v. State of Bihar, (1989) 1 SCC 229, Patel Engineering Ltd. v. Union of India, (2012) 11 SCC 257, Gorkha Security Services v. Government (NCT of Delhi), (2014) 9 SCC 105, Amit Mishra v. General Manager (Transport), M.P. State Civil Supplies Corporation Ltd., Bhopal, 2008 (4) M.P.L-J. 542 - The court discussed the necessity of giving an opportunity through show cause notice before blacklisting, emphasizing the principles of natural justice and the requirement to state the proposed action of blacklisting in the notice. The order of blacklisting was quashed due to the absence of a proper show cause notice.

Fact of the Case:

The petitioner challenged the order debarring them from business for non-compliance with contract conditions despite the contract being extended. The respondents alleged non-compliance and issued notices, leading to the impugned order.

Finding of the Court:

The court found that no proper show cause notice was issued before blacklisting, emphasizing the necessity of giving an opportunity and stating the proposed action of blacklisting in the notice.

Issues: Non-compliance with contract conditions, validity of the blacklisting order, necessity of a show cause notice before blacklisting.

Ratio Decidendi: The court emphasized the requirement of a show cause notice before blacklisting, as per legal precedents, and quashed the blacklisting order due to the absence of a proper show cause notice.

Final Decision: The order of blacklisting dated 17-5-2016 was quashed by the court.

ORDER :

In the instant petition, invoking the jurisdiction under Article 226 of the Constitution of India, petitioner has challenged the order dated 17-5-2016, whereby the petitioner has been debarred from business in the respondent Nos. 2 to 4 Company for a further period of 3 years from the date of the impugned order on the pretext of non compliance of the conditions of the contract despite communications/letters dated 3-1-2015 and 23-1-2015 for not making timely payments to the personnel engaged.

2. Factual expose succinctly adumbrated in nutshell is that the petitioner was awarded a contract for providing work force in the respondents establishment as Data Entry Operators and other skilled and unskilled labourers as and when required for a period as stipulated in the contract dated 17-11-2014 and 3-1-2015. It is further stated that as per terms and conditions of the contract, the period of the contract was extendable on mutual consent. The petitioner was awarded a work order dated 3-1-2015 for providing twelve Data Entry Operators for a period of one year from the date of contract and the wages to be paid accordingly to the rates mentioned therein. Further another order was issued by the respondents company dated 23-1-2015 for providing three unskilled labourers for Maheshwar Hydro-Electric Project on identical terms and this is with reference to the original work order dated 17-11-2014. On the very same day, another order was issued by the respondents company dated 23-1-2015 for providing one Data Entry Operator for Maheshwar Hydro-Electric Project on identical terms and this is with reference to the original work order dated 3-1-2015. According to the petitioner, there was no deficiency in compliance of the terms of both the contracts. He has further submitted that in response to certain letters issued by the respondents company, the petitioner has filed reply and there was satisfactory explanation on his part. It is further stated that by the order dated 26-11-2015, the period of the contract of the petitioner was further extended for a period of one year from 1-12-2015 on the same terms and conditions, which were enshrined in the order dated 17-11-2014. It is contended that despite the aforesaid extension of contract, respondents company issued the impugned order dated 17-5-2016, whereby the petitioner has been debarred/blacklisted from the business for a period of three years from the date of the impugned order though the contract was not cancelled as the petitioner completed the contract as per requirement of the respondents.

3. Per contra combating the aforesaid contention, learned counsel for the respondents submitted that the petitioner has failed to comply with the terms and conditions of the contract and despite number of letters/notices issued to him, he did not comply with the directions issued by the respondents company and therefore, impugned action was taken against the petitioner. It is further submitted that the letters which have been issued are in the shape of notice for taking impugned action of blacklisting.

4. The following submissions have been made by the learned Senior Counsel for the petitioner:

(i) No show cause notice has been issued before taking impugned action of blacklisting.

(ii) The so called letters/notices referred by the respondents can not be termed to be a show cause notice, as there is no reference to the proposed action of blacklisting against the petitioner and therefore, he had no opportunity of making representation in this regard.

5. Before proceeding further to consider the submissions of the rival parties, it is apposite to mention here that it is admitted by both the parties that the contract has not been terminated and the contract of the petitioner was extended vide order dated 26-11-2015 for a further period of one year from 1-12-2015. However, the respondents have passed the impugned order debarring the petitioner from business by the impugned order during the subsistence of co
























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